UK Accounting Glossary
One company exercises significant influence over another, falling short of complete control.
In accounting and business valuation an associate company (also known as an associate or associated company) is a company in which another company owns a significant portion of voting shares, usually between 20 – 50%. In this case, an owner does not consolidate the associate’s financial statements.
One should be concerned with how the associated company is to be treated in the parent’s consolidated financial statements.
Jones Textiles Ltd. and its associated company Highgrade Fashion were subject to tax advantages as a result of the new regulations.
An Associate Company is defined under the Companies Act, 2013 as a company in which that other company has a significant influence, but which is not a subsidiary company of the company.
A Subsidiary company refers to a company in which the holding company either:
Therefore, an Associate Company, is a company in which another company has a significant influence but not enough to gain a majority stake.
A company which holds more than 20% stake in other company is termed an Associate Company; but when it holds more than 50% stake it is then classed as a Subsidiary.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Associated Company are sourced/syndicated from:
This glossary post was last updated: 23rd December 2018.